Could the cross-border tomato feud cost you more?

By Dudley Althaus

Updated 12:07 pm, Sunday, October 7, 2012

Photo: Keith Dannemiller

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In the greenhouses at the Del Campo center, workers cut and harvest greenhouse beefsteak tomatoes. Greenhouse and hydroponic production are more expensive but less financially risky than growing in open fields.

In the greenhouses at the Del Campo center, workers cut and harvest greenhouse beefsteak tomatoes. Greenhouse and hydroponic production are more expensive but less financially risky than growing in open fields.

Photo: Keith Dannemiller

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The Del Campo agricultural complex in Sinaloa, Mexico, is where beefsteak tomatoes get the first selection, sorting and washing after the greenhouse.

The Del Campo agricultural complex in Sinaloa, Mexico, is where beefsteak tomatoes get the first selection, sorting and washing after the greenhouse.

MEXICO CITY - The cross-border tomato feud has gotten about as rotten as any food fight probably could.

Florida-led U.S. growers apparently have won Washington over to their long-standing argument that Mexican farmers deviously underprice their tomatoes to conquer the American table. The Mexicans accuse U.S. farmers of covering for their incompetence by using election year leverage to squelch free trade.

Texans have a stake in this beef. Mexican tomatoes, mostly grown in the Pacific Coast state of Sinaloa, are about all that's to be found in Texas groceries and restaurants much of the year.

"From a Texas perspective, a lot of the produce we handle is coming from Mexico … because we don't grow those products anymore," said Marco Palma, an agricultural economist at Texas A&M who points out that the state's tomato farmers lost out to imports years ago.

Charges of cheating and political conniving are flying across the Rio Grande. Talk of a trade war echoes in the national capitals. Whether they're talking tomatoes or tomates, almost everyone involved seems far from working it out.

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By the numbers

$1.8 billion Value of Mexico's annual tomato production.

$8.5 billion Value of U.S. produce, grains and livestock Mexico imported last year.

$8.7 billion Value of agricultural products Mexico shipped north.

'Dumping' complaints

Importing Mexican produce has become big business on the Texas border, reaching some 140,000 truckloads a year, according to the Texas International Produce Association. Most Mexican tomatoes are imported through Arizona. But improved highways linking Sinaloa in Mexico to the South Texas border will bring an increasing share of the trade to the state.

Mexican and U.S. producers have been sparring about tomatoes since the cross-border trade began more than 100 years ago.

In play this time is a 1996 arrangement by which U.S. producers suspended their complaints of "dumping" - which is the international selling of products below cost to gain market share - against Mexican growers in exchange for setting minimum prices for imported tomatoes.

Prodded by Florida growers, who claim backing from more than 85 percent of American tomato producers, the U.S. Commerce Department decided last week to provisionally cancel the deal.

If after further review the department definitively scraps the agreement, U.S. growers will be free to press new dumping complaints. They could possibly win tariffs on the Mexican-produced tomatoes that will make them more expensive for U.S. consumers, helping the Florida farmers compete.

"With the collapse of prices in the marketplace over the last year, the agreement has simply become too problematic for domestic producers to sit still," said Reggie Brown, executive vice president of the Florida Tomato Exchange. "U.S. producers are being hurt, growers are going out of business, acreage planted is contracting and massive losses are being incurred."

Mexicans' position

Mexican growers and officials, along with many allies among U.S. retailers, restaurants and produce brokers, argue the Commerce Department ruling is about election-year politics in a swing state that's key to President Barack Obama's re-election.

"This has to do purely with politics," charges Martin Ley, whose family ranks among Mexico's largest tomato growers and exporters. "The whole process is very strange."

Past trade disputes over the access of Mexican trucks to the United States and the importation of Mexican avocados have brought retaliatory tariffs on U.S. exports to Mexico.

"If Mexico's interests end up being affected, Mexico will respond," Arturo Sarukhan, Mexico's ambassador in Washington, D.C., said of the preliminary ruling. "Ask those who were in the cross hairs over the trucking dispute. When Mexico aims, Mexico hits the target."

Mexico bought about $8.5 billion worth of U.S. produce, grains and livestock last year and shipped another $8.7 billion in agricultural products north, according to the Commerce Department.

Modern methods

Tomatoes rank among Mexican agriculture's prominent winners from the North American Free Trade Agreement, or NAFTA, which cut or greatly reduced tariffs on most trade between the United States, Mexico and Canada. Bolstered by exports - which now supply as much as a third of the U.S. market - the value of Mexican tomato production has more than quadrupled in the 18 years since the treaty took hold, becoming a $1.8 billion annual business.

Mexican farmers in the meantime have modernized, with greenhouse and hydroponic production replacing much of the riskier but far less expensive field cultivation, said Palma, the Texas A&M expert. Florida growers could have a basis for dumping claims by proving that Mexican tomato export prices don't reflect those more expensive production techniques.

"That's something that has to be looked at," Palma said.

Tip of hat to Florida

The Commerce Department ruling may yet be reversed. Officials have until next spring to make it permanent. But Mexican growers and their U.S. allies argue even the preliminary decision creates confusion that hurts them in the marketplace.

"The uncertainty in the whole situation has growers fearful of putting money into the ground," said Lance Jungmeyer, president of Nogales, Arizona-based Fresh Produce Association of the Americas, which represents Mexican producers and U.S. importers. "Strategically you have to tip your hat to Florida. They are playing the government to get exactly what they want, which is uncertainty about Mexico."